Debenhams is considering launching a CVA in a bid to counteract the burden of its onerous rental agreements on its finances, having secured a cash injection.
The ailing department store chain is reportedly looking to close 20 of its 165 stores as well as to negotiate rent reductions on others.
It will reveal that it has secured a cash injection from retailers this week, according to The Sunday Telegraph. A debt-for-equity swap is still under consideration, reported the paper.
Debenhams has been in discussions with lenders in recent weeks as it looks to refinance banking facilities over the next 12 months in a bid to stay afloat.
The retailer is already on track to close between 10 and 50 stores over the next three to five years but is reportedly running out of headroom on its £520m borrowing facilities and has a quarterly rent payment due on March 25.
The business declined to comment but is expected to update shareholders on the situation within the next few weeks.
Debenhams, which employs around 25,000 people, has endured a torrid month. Continued poor trading over the golden quarter culminated in investor Mike Ashley, who owns a 29% stake in the business, engineering a coup to get chair Sir Ian Cheshire and chief executive Sergio Bucher off the board.
While Bucher remains in place as chief executive, Cheshire resigned from his position with immediate effect.